- Record Q1 Revenue of $291 Million (9% increase over prior
year)
- Record Q1 Earnings Per Diluted Share
- GAAP EPS of $1.10
- Non-GAAP EPS of $0.91
- Company Raises FY 2020 Guidance
OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ:
OSIS) today announced financial results for the quarter ended
September 30, 2019.
Deepak Chopra, OSI Systems’ Chairman and Chief Executive
Officer, stated, “We are pleased with the first quarter performance
as we delivered record first quarter revenues and solid earnings.
We have a robust pipeline of opportunities and a healthy backlog,
putting us in a good position for the remainder of fiscal
2020.”
The Company reported revenues of $290.9 million for the first
quarter of fiscal 2020, an increase of 9% from the $266.2 million
reported for the first quarter of fiscal 2019. Net income for the
first quarter of fiscal 2020 was $20.7 million, or $1.10 per
diluted share, compared to net income of $9.4 million, or $0.50 per
diluted share, for the first quarter of fiscal 2019. Non-GAAP net
income for the first quarter of fiscal 2020 was $17.2 million, or
$0.91 per diluted share, compared to non-GAAP net income for the
fiscal 2019 first quarter of $15.3 million, or $0.81 per diluted
share.
As of September 30, 2019, the Company's backlog was $869 million
compared to $911 million as of June 30, 2019. The Company generated
positive operating cash flow of $25 million during the first
quarter of fiscal 2020 compared to negative operating cash flow of
$3 million during the first quarter of fiscal 2019.
Mr. Chopra commented, “Our Security division started the year
strong, achieving 11% sales growth resulting in record first
quarter revenues of $189 million. We continue to be well positioned
in the global marketplace to capitalize on future
opportunities.”
Mr. Chopra continued, “Our Optoelectronics and Manufacturing
division continued in the last fiscal quarter to perform well as we
leveraged sales growth of 4% to significant year-over-year
operating margin expansion driven by a strong mix of revenues and
operational execution.”
Mr. Chopra concluded, “Our Healthcare division revenues for the
first fiscal quarter of 2020 increased 5% over the same prior-year
period. With the benefit of the organizational changes we
implemented in fiscal 2019 coupled with strong contribution
margins, the operating income in our Healthcare division
significantly improved over the prior-year first quarter. We remain
focused on enhancing our core products and developing new
products.”
Fiscal Year 2020 Outlook
The Company is raising its fiscal year 2020 sales guidance to a
range of $1.238 billion to $1.273 billion, which would represent
growth of 5% to 8% compared to the prior fiscal year. The Company
is also increasing its non-GAAP earnings guidance to $4.61 to $4.83
per diluted share for fiscal 2020. Actual sales and non-GAAP
diluted earnings per share could vary from this guidance due to
factors discussed under “Forward-Looking Statements” or other
factors.
The Company’s fiscal 2020 diluted earnings per share guidance is
provided on a non-GAAP basis only. The Company does not provide a
reconciliation of guidance for non-GAAP diluted EPS to GAAP diluted
EPS (the most directly comparable GAAP measure) on a
forward-looking basis because the Company is unable to provide a
meaningful or accurate compilation of reconciling items and certain
information is not available. This is due to the inherent
difficulty and complexity in accurately forecasting the timing and
amounts of various items included in the calculation of GAAP
diluted EPS, such as acquisition costs and other non-recurring
items that have not yet occurred, are out of the Company’s control,
or cannot be reasonably predicted. For the same reasons, the
Company is unable to address the probable significance of
unavailable information which may be material and therefore could
result in GAAP diluted EPS, the corresponding GAAP financial
measure, being materially different from projected non-GAAP diluted
EPS.
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net
income, non-GAAP diluted earnings per share, non-GAAP operating
income (loss) by segment and non-GAAP operating margin, all of
which are non-GAAP financial measures. The presentation of these
non-GAAP figures for the three months ended September 30, 2018 and
2019 is provided to allow for the comparison of the underlying
performance of the Company, net of restructuring and other charges
(including certain legal costs), amortization of intangible assets
acquired through business acquisitions and non-cash interest
expense primarily related to convertible debt, and their associated
tax effects, and the impact of discrete income tax items.
Management believes that these non-GAAP financial measures provide
(i) enhanced insight into the ongoing operations of the Company,
(ii) meaningful information regarding the Company’s financial
results (excluding amounts management does not view as reflective
of ongoing operating results) for purposes of planning,
forecasting, and assessing the performance of the Company’s
businesses, (iii) a meaningful comparison of financial results of
the current period against results of past periods, and (iv)
financial results that are more comparable to financial results of
peer companies than are GAAP figures. Non-GAAP financial measures
should not be assessed in isolation or as a substitute for measures
of financial performance prepared in accordance with GAAP. These
non-GAAP measures may not be the same as measures used by other
companies due to possible differences in methods and in the items
or events for which adjustments are made.
Reconciliations of GAAP to non-GAAP financial information are
provided in the accompanying tables. The financial results
calculated in accordance with GAAP and reconciliations from those
financial results should be carefully evaluated.
Conference Call Information
The Company will host a conference call and simultaneous webcast
beginning at 1:30pm PT (4:30pm ET) today to discuss its results for
the first quarter of fiscal 2020. To listen, please visit the
Investor Relations section of the OSI Systems website,
http://investors.osi-systems.com/index.cfm and follow the link that
will be posted on the front page. A replay of the webcast will be
available beginning shortly after the conclusion of the conference
call until November 7, 2019. The replay can either be accessed
through the Company’s website, www.osi-systems.com, or by
telephonic replay by calling 1-855-859-2056 and entering the
conference call identification number 7817718 when prompted for the
replay code.
About OSI Systems
OSI Systems is a vertically integrated designer and manufacturer
of specialized electronic systems and components for critical
applications in the homeland security, healthcare, defense and
aerospace industries. The Company combines more than 40 years of
electronics engineering and manufacturing experience with offices
and production facilities in more than a dozen countries to
implement a strategy of expansion into selective end-product
markets. For more information on OSI Systems or its subsidiary
companies, visit www.osi-systems.com. News Filter: OSIS-E
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements relate to the Company's current
expectations, beliefs, and projections concerning matters that are
not historical facts. Forward-looking statements are not guarantees
of future performance and involve uncertainties, risks,
assumptions, and contingencies, many of which are outside the
Company's control and which may cause actual results to differ
materially from those described in or implied by any
forward-looking statement. Forward-looking statements include, but
are not limited to, information provided regarding expected
revenues, earnings, growth, and operational performance in fiscal
2020. The Company could be exposed to a variety of negative
consequences as a result of delays related to the award of domestic
and international contracts; failure to secure the renewal of key
customer contracts; delays in customer programs; delays in revenue
recognition related to the timing of customer acceptance;
unanticipated impacts of sequestration and other U.S. Government
budget control provisions; changes in domestic and foreign
government spending and budgetary, procurement and trade policies
adverse to the Company's businesses; global economic uncertainty;
unfavorable currency exchange rate fluctuations; effect of changes
in tax legislation; market acceptance of the Company's new and
existing technologies, products, and services; the Company's
ability to win new business and convert orders received to sales
within the fiscal year; enforcement actions in respect of any
noncompliance with laws and regulations, including export control
and environmental regulations and the matters that are the subject
of some or all of the Company's investigations and compliance
reviews; contract and regulatory compliance matters, and actions
which, if brought, could result in judgments, settlements, fines,
injunctions, debarment, or penalties; and other risks and
uncertainties, including, but not limited to, those detailed herein
and from time to time in the Company's Securities and Exchange
Commission filings, which could have a material and adverse impact
on the Company's business, financial condition, and results of
operations. For additional information on these and other factors
that could cause the Company's future results to differ materially
from those in any forward-looking statements, see the section
titled "Risk Factors" in the Company's most recently filed Annual
Report on Form 10-K and other risks described therein and in
documents subsequently filed by the Company from time to time with
the Securities and Exchange Commission. Undue reliance should not
be placed on forward-looking statements, which are based on
currently available information and speak only as of the date on
which they are made. The Company assumes no obligation to update
any forward-looking statement made in this press release that
becomes untrue because of subsequent events, new information, or
otherwise, except to the extent it is required to do so under
federal securities laws.
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three Months Ended
September 30,
2018
2019
Revenue:
Products
$
182,480
$
209,761
Services
83,769
81,091
Total revenues
266,249
290,852
Cost of goods sold:
Products
125,371
146,342
Services
44,965
45,299
Total cost of goods sold
170,336
191,641
Gross profit
95,913
99,211
Operating expenses:
Selling, general and administrative
61,707
62,177
Research and development
13,753
14,246
Restructuring and other charges (benefit),
net
4,196
(2,099
)
Total operating expenses
79,656
74,324
Income from operations
16,257
24,887
Interest and other expense, net
(5,332
)
(4,736
)
Income before income taxes
10,925
20,151
(Provision) benefit for income taxes
(1,523
)
592
Net income
$
9,402
$
20,743
Diluted income per share
$
0.50
$
1.10
Weighted average shares outstanding –
diluted
18,736
18,903
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED SEGMENT
INFORMATION
(in thousands)
Three Months Ended
September 30,
2018
2019
Revenues – by Segment:
Security division
$
169,960
$
188,964
Healthcare division
38,273
40,208
Optoelectronics and Manufacturing
division, including intersegment revenues
70,954
73,637
Intersegment eliminations
(12,938
)
(11,957
)
Total
$
266,249
$
290,852
Operating income (loss) – by
Segment:
Security division
$
23,050
$
20,318
Healthcare division
(1,875
)
2,817
Optoelectronics and Manufacturing
division
6,825
8,769
Corporate
(11,351
)
(7,337
)
Intersegment eliminations
(392
)
320
Total
$
16,257
$
24,887
OSI SYSTEMS, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2019
September 30, 2019
Assets
Cash and cash equivalents
$
96,316
$
85,142
Accounts receivable, net
238,440
245,093
Inventories
273,711
268,761
Other current assets
32,432
38,140
Total current assets
640,899
637,136
Property and equipment, net
127,385
128,293
Goodwill
307,108
306,713
Intangible assets
132,954
129,633
Other non-current assets
56,518
88,327
Total Assets
$
1,264,864
$
1,290,102
Liabilities and Stockholders'
Equity
Bank lines of credit
$
88,000
$
95,000
Current portion of long-term debt
804
801
Accounts payable and accrued expenses
169,718
176,280
Other current liabilities
123,486
122,621
Total current liabilities
382,008
394,702
Long-term debt
257,752
260,007
Other long-term liabilities
73,377
93,829
Total liabilities
713,137
748,538
Total stockholders’ equity
551,727
541,564
Total Liabilities and Stockholders’
Equity
$
1,264,864
$
1,290,102
OSI SYSTEMS, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME AND EARNINGS PER SHARE (in thousands, except
earnings per share data)
Three Months Ended September
30,
2018
2019
Net income
Diluted EPS
Net income
Diluted EPS
GAAP basis
$
9,402
$
0.50
$
20,743
$
1.10
Restructuring and other charges (benefit),
net
4,196
0.22
(2,099
)
(0.11
)
Amortization of acquired intangible
assets
4,168
0.22
3,597
0.19
Non-cash interest expense
1,926
0.10
2,163
0.11
Tax effect of above adjustments
(2,887
)
(0.15
)
(1,021
)
(0.05
)
Impact from discrete income tax items
(1,542
)
(0.08
)
(6,214
)
(0.33
)
Non-GAAP basis
$
15,263
$
0.81
$
17,169
$
0.91
RECONCILIATION OF GAAP TO
NON-GAAP
OPERATING INCOME (LOSS) AND
OPERATING MARGIN BY SEGMENT
(in thousands, except
percentages)
Three Months Ended September
30, 2018
Security Division
Healthcare Division
Optoelectronics and
Manufacturing Division
Corporate /
Elimination
Total
% of Sales
% of Sales
% of Sales
% of Sales
GAAP basis – operating income (loss)
$
23,050
13.6
%
$
(1,875
)
(4.9
)%
$
6,825
9.6
%
$
(11,743
)
$
16,257
6.1
%
Restructuring and other charges
46
0.0
191
0.5
374
0.6
3,585
4,196
1.6
Amortization of acquired intangible
assets
3,099
1.8
-
-
1,069
1.5
-
4,168
1.5
Non-GAAP basis– operating income
(loss)
$
26,195
15.4
%
$
(1,684
)
(4.4
)%
$
8,268
11.7
%
$
(8,158
)
$
24,621
9.2
%
Three Months Ended September
30, 2019
Security Division
Healthcare Division
Optoelectronics and
Manufacturing Division
Corporate /
Elimination
Total
% of Sales
% of Sales
% of Sales
% of Sales
GAAP basis – operating income (loss)
$
20,318
10.8
%
$
2,817
7.0
%
$
8,769
11.9
%
$
(7,017
)
$
24,887
8.6
%
Restructuring and other (benefit), net
-
-
-
-
(13
)
0.0
(2,086
)
(2,099
)
(0.7
)
Amortization of acquired intangible
assets
2,800
1.5
-
-
797
1.1
-
3,597
1.2
Non-GAAP basis– operating income
(loss)
$
23,118
12.2
%
$
2,817
7.0
%
$
9,553
13.0
%
$
(9,103
)
$
26,385
9.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191024005938/en/
OSI Systems, Inc. Ajay Vashishat Vice President, Business
Development Tel: (310) 349-2237 avashishat@osi-systems.com
OSI Systems (NASDAQ:OSIS)
Historical Stock Chart
From Jun 2024 to Jul 2024
OSI Systems (NASDAQ:OSIS)
Historical Stock Chart
From Jul 2023 to Jul 2024